Fractional property ownership sellers shutting up shop

By Ngoc Diem   July 20, 2023 | 08:14 pm PT
Fractional property ownership sellers shutting up shop
A person looks at a smartphone app and website of Moonka, a joint property investment platform, which is no longer active. Photo by VnExpress/Thu Huong
Companies and platforms offering fractional ownership of properties are starting to disappear after a period when the model was booming.

Hoang, a real estate broker, said a big property project in Hanoi has stopped selling fractional ownership after trying it out for four months.

The developer had split the property into 50 portions, each equivalent to 2% of its value.

Investors can buy one or more portions at a small price and wait for the property to appreciate.

But Hoang said buyers have not been able to resell in the market since there is low demand and the developer now no longer sells fractions.

In the first half of this year many platforms selling fractional properties shut down after a three-year boom ended last year.

Moonka, which sometimes split properties into 1,000 portions and sold them for as little as a few million dong (VND1 million = $42.30), is no longer in the business.

Its website has not been updated and the last post in its Facebook page was in January.

According to Moonka’s website, in the last two years it sold three properties in Ho Chi Minh City and Lam Dong Province to around 74 buyers and promised them 15-18% returns within six months.

But there is no information about whether the investors received any money.

Another similar platform, Revex, shut down after selling fractional properties for as low as VND1 million.

Last year the State Securities Commission of Vietnam warned investors that some websites and smartphone apps were raising money through fractional investments, but this was not regulated by the laws.

Among the platforms it mentioned was Real Stake, which split a property into 80 or 150 portions and promised annual returns of 9%.

Another one, Tikop, offered fractional investments starting at VND50,000 and promised returns of 10%.

Tran Khanh Quang, CEO of property developer Viet An Hoa, said many of these platforms used blockchain technology to entice buyers.

But after they invest, owners cannot make a decision to sell the property on their own and have to seek agreement from other owners a complicated process not supported by any legal framework, he claimed.

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